Achieving Millionaire Status in Retirement through Warren Buffett's ETF Strategy
With a Millionaire-Making ETF Picked by the Oracle of Omaha
Warren Buffett, the world-renowned investor, isn't just known for his stock game – he's also a fan of ETFs. You might be able to join the millionaires club before retirement with the right ETF he endorses.
At 92, Buffett is a legend for his knack for picking stellar stocks. With Berkshire Hathaway under his leadership since 1965, he's delivered returns that make others green with envy. But what you might not know is that he's fond of another asset class – ETFs.
In his 2013 shareholder letter, Buffett suggested investing most of the money left to his family in a low-cost S&P 500 index fund. True to his words, Berkshire Hathaway is invested in two such ETFs that track the American index: the SPDR S&P 500 ETF Trust and the Vanguard S&P 500 ETF. There are plenty more S&P 500 ETFs out there, all aiming for a close replication of the index.
Millionaire Status Achievable with the Right Broker and Timing
According to The Motley Fool, Buffett's ETFs offer an excellent investment opportunity given the favorable market conditions. Buffett himself emphasized in a 2018 interview with CNBC that "The best chance to deploy capital is when things are down." With careful planning, you could become a millionaire solely through an S&P 500 ETF.
But, choosing the right broker is crucial. Fees can make or break your goal. So, research brokers offering the best price-performance ratio to maximize your returns.
While the S&P 500 has had its twists and turns, such as the 20% drop in 2022, it has averaged a 10% annual return over the long term. If you invest €300 per month in an S&P 500 ETF today, with an average annual return of 10%, you'll be a millionaire in 35 years (excluding fees and costs). You can reach this goal even sooner by investing more each month – €500 per month will make you a millionaire in 30 years. The key is that becoming a millionaire requires little extra effort.
Jeff Bezos, another heavy-hitter in the business world, cautions against overspending and suggests investing in these three assets.
If it's cost-effective ETF trading you're after, consider brokers with zero-commission trading and low account minimums, like Charles Schwab, Public, and J.P. Morgan Self-Directed Investing. These brokers offer no commission fees for stock/ETF purchases, which is essential for maximizing returns from low-expense-ratio ETFs like VOO (0.03%) and SPY (0.09-0.095%). Other factors to consider include ETF liquidity and whether the broker supports automated investing for efficient cost-averaging.
- With the advice of the Oracle of Omaha, Warren Buffett, you could potentially join the millionaires club before retirement by investing in the right S&P 500 ETF.
- Buffett, known for his knack for picking stellar stocks, has also shown a preference for investing in ETFs like the SPDR S&P 500 ETF Trust and the Vanguard S&P 500 ETF.
- To maximize returns from low-expense-ratio ETFs like VOO and SPY, consider cost-effective brokers like Charles Schwab, Public, and J.P. Morgan Self-Directed Investing, which offer zero-commission trading and low account minimums.
- Careful planning, researching brokers with the best price-performance ratio, and investing in a personal finance strategy closely aligned with Buffett's advice can make the goal of becoming a millionaire achievable through S&P 500 ETFs.
